Any startup if willing to attract investments should constantly concentrate on two essential goals:
Developing the product itself
Raising the capital
The problem itself lays in the way how to achieve both these goals having limited resources. However, the problem is more global.
As in any other businesses, the founder should answer one single question to himself - Why he’s doing this project? Does he want to make money on it? In what way then? Maybe, just to make a successful business in a local market? Maybe he wants to create a unique technology and sell it to the strategic investor, who would definitely see the true value of the product and the geniality of the startupper? Or perhaps he wants to create that one fabled unicorn or in other words to orientate on the greatness of his decision, the readiness to enter the alliances, partnerships and play with the fate?
All these questions are purely rhetorical until the startup product doesn’t show any tracking, but when the product made up some money and funds are needed for the next step of the development, well, it is a high time to consider future steps.
Nevertheless, startups are usually in the state of creative indifference. They don’t choose one strict way of development but they implement the strategy to increase the Incoming Appropriation Requests. In simple words, they are trying not to exclude any possible variants of investments. Moreover, almost every startup has a pure belief that a miracle will happen and somebody will come and bring large sums of money to the startup project on its own terms. So in order not to exclude all these nice possibilities, the startup project is presented to the world as abstract as possible, pursuing the only one goal - to be attractive to everyone.
Startupper tries to take part in all possible startup-related events, sends applicaitions to all accelerators and funds, and works for advertising his product on any viable platform. A trip to the “valley” is also a must. All these require a significant amount of money and time. His money and time.
Consequently, we have a set of questions like: What should an investor do? How does he choose startups? What does investor value most in the startup? Which criteria are selected to evaluate a startup?
Indeed, the most common thing we hear from the investors is that the startup should have a reliable team and significant market to work with. If we have to pick startups based on such criteria and give money to the chosen ones, we would surely have an indefinite percent of the valid startups, in which investments would be higher than the expenditure on everything else. However, the fact is that there are no stated rules for investors. Each chooses their own investment strategies, their evaluation criteria letting see if the startup has any perspectives. In fact, it reminds a competition. Investors do their best to search the best and the most promising startups. “If everyone picks startups considering team and market, we would pick by technology and final product, which they develop. After all, we will find a suitable place to sell the product.” or “If everyone count on the math and calculations of the return on investments, potential monetary flow and a threat model, then I will rely on intuition.”
Also, we should not forget about the vast market of strategic investors, which are aiming at searching startups, whose products or technology would allow them (corporations) solve their technical issues and issues relating the increase of the functional or consumptive quality of their products and services. Venture capital investors state that global multinational corporations like Google or Amazon by the activity of their investment foundations leave almost no space to work for other investors in similar topics. This situation is, actually, a perfect possibility to the startups, which are aiming to provide a solution for technological issues. Nevertheless, it is essential to remember about hundred thousands of other corporations which are not that famous for investing in a technological startups, but which have significant funds dedicated to the strategic development. This is a vast technological market for the corporations, which can even prevail in the market of the straight venture investment in a financial aspect.
So if a startup wants to be funded, it should show all its possible advantages to the investor to be noticed by the investor. How can it be done if you have limited time for meetings and business trips to the potential investors? Also, you still have to pitch startup to the endless list of sponsors. The fact is if an investor shows interest in you, then you will be obliged to write an endless number of business plans upon investors’ request. All this takes time and money. Your time and money.
How to trim in the way of receiving the investments for the startups?
Rocket DAO expert community are the qualified business professionals who can formalise their experience and knowledge dedicating their time to evaluation and acceleration of the startups on the Rocket DAO platform. They have delivered a unique set of requirements to the information which could demonstrate a startup in all possible aspects. Such a kind of startup presentation is the most innovative way to interest investors of different strategies and needs.
The whole methodology is focused on the division of the project into functional parts. Each of these parts, individually or in various combinations, might be interesting to many investors.
A startup only has to:
Describe its project by answering concise questions;
Confirm the accuracy of the information provided with documents and links to the external sources to earn the trust of the investors;
Receive experts’ community evaluation and recommendations for improvements.
Since answering the experts’ questions is a demanding and a challenging task, it is combined with onboarding to the Rocket DAO platform:
Filling in the project card with the little information about it during the registration on the platform. As a result, the project gets a Onepager.
Specifying the information about the project for the express evaluation by the following criteria: Team, Product, Business model, Market. Preliminary expert evaluation of the project and rating ranking. Finally, we get an Express evaluation report.
Business plan preparation. The project receives a perfectly done and well-structured Business plan using our templates.
Providing additional information and documents, which confirm the validity of the information about the project. As a result, we have the following set of final documents: Onepager, Business plan, shortened version of the Evaluation report of the project made by Rocket DAO expert community, a full version of the Due Diligence.
Such consistency of documentation is necessary so that the projects could get feedback from experts and investors on the initiatory stage of documents preparation. This means that the project can interest the investors by filling a small version of a card about the project. But let’s be honest, chances are not that high. While working on the development of your project, if consistently spreading info about your product, transforming your plans and aims with the help of experts, your startup will gain more and more chances to reach the ultimate goal. In other words, nobody can prohibit the startup from having its way and pass Due Diligence, having passing all the previous stages.
It is clear that by pursuing its own selfish goals Rocket DAO wants to automate the whole investment process. It means that we will do everything that will increase investment chances for the startup on the platform. However, it doesn’t mean that the startup cannot use the documentы, created on the platform, somewhere else. A startup can download the documents, copy the link to the online-document or print them out and show to the business gurus or to investment funds.
Yet, all these documents are only a stage where you bring your startup into commodity form, creating a ‘wrapper’. All the benefits for the investors are inside, but it is a subject of a new article.
To be continued ...
Author: Andrew Miroshnichenko
Translated by: Dmitro Basok